Williams J
IN THE GRAND COURT OF THE CAYMAN ISLANDS FAMILY DIVISION CAUSE NO: FAM 44 OF 2005 BETWEEN: SD Petitioner AND: GD Respondent Appearances: Mr. Alistair Walters of Campbells for the Petitioner Mr. David Holland of Samson & McGrath for the Respondent Before: Hon. Mr. Justice Richard Williams Heard: 7 March 2016 Ex Tempore Judgment: 7 March 2016 Draft Transcript circulated: 8 March 2016 Perfected Ex Tempore Judgment provided: 10 March 2016 HEADNOTE Application to vary ancillary relief order - Periodical payments for children - Education and medical expenses for children - Court’s duty when approving consent order. EX TEMPORE JUDGMENT
This is an Ex Tempore Judgment. Although a consent order has been reached by the parties at Court today, it may be helpful for there to be a summary of background that the Court has considered when determining that it is appropriate for the said order to be approved. A copy of the transcript of this Judgment will be made available to them after it has been perfected.
I have before me two summonses. The first is the Summons of SD, the Petitioner wife, dated 24 December 2014. In her Summons she seeks: (i) an order for the Respondent to pay outstanding sums due under paragraph 2 of the Consent Order dated 21 October 2005 within seven days, failing which leave to be granted to her to issue a writ of sequestration against the Respondent pursuant to the Grand Court Rules ("GCR") O. 46, r.5; (ii) an order for the Respondent to pay sums outstanding pursuant to paragraph 3 of the said Consent Order within seven days, failing which leave be granted to her to issue a writ of sequestration; and (iii) an order that the Respondent comply with paragraph 2 of the said Consent Order by reinstating the payments by standing orders within seven days of the order.
The second Summons is one filed by GD, the Respondent husband, which he filed on 4 March 2015. In that Summons he seeks: (i) a reduction in the amount of child maintenance and a change in the method of payment for C ordered under paragraph 2 of the said Consent Order; (ii) a variation of paragraph 3 of the said Order so that there be a requirement for the Petitioner to liaise, and for the parties to agree, in advance of incurring all non-urgent medical, dental and optical expenses in relation to the children and to provide him with copies of all receipts/invoices in respect of any pre-agreed expenses on a monthly basis; and (iii) an order that any orders for child maintenance and medical, dental and optical expenses last until the respective child reaches the age of 18 or, if attending full-time tertiary education, until the age of 21.
I hope that the parties will not be offended if from now on I refer to them, for convenience, as SD and GD. BACKGROUND THE PARTIES
The parties were married in the Cayman Islands on 21 May 1994. There are two children of the marriage; C who is aged 18 and L aged 14. Although there is a joint custody order in place, it is evident that the mother, pursuant to a care and control order, has since the divorce been the main physical carer of the children.1 C is has been in full-time education at colleges in the United States since August 2014, having started at her present college in New York in the Fall of 2015. L is attending a private high school on Grand Cayman. 1 Joint custody, care control Order made by Chief Justice Smellie and 21 October 2005. THE PROCEEDINGS
On 2 March 2005 SD filed her Petition for the dissolution of the marriage. On 12 April 2005 an order was made proving the Petition.
The issues surrounding ancillary relief were resolved in a Consent Order approved by Chief Justice Smellie on 21 October 2005. For the purpose of this hearing I need not set out the full terms of that Order. However, I highlight that: (i) Paragraph 2 of the said Order provided that GD shall pay maintenance to SD in respect of the two children of the marriage in the sum of CI$3,500 per month to be paid monthly on the last working day of each month by standing order until (C) and (L) each respectively reach the age of eighteen years or until each respectively have completed their further education and any other professional or other training at University or similar institution. The paragraph also provided that there should be no future request by SD for an increase in the amount of maintenance per month of CI$3,500; and (ii) Paragraph 3 of the said Order provided that SD and GD should equally bear the cost of the educational, medical, dental and optical expenses of the children of the marriage until they respectively reach the age of eighteen years or until they respectively have completed their further education and any other professional or other training at University or similar institution.
The Decree of Dissolution of Marriage was certified by the Chief Justice on 21 October 2005.
Regrettably, there have been a number of applications made to Court concerning child arrangement orders and child finance orders. On 24 June 2011 GD filed a Summons seeking various orders. Relevant to the issues before me at paragraph 2 GD sought an order requiring SD to keep him informed about the children’s health, doctors’ appointments and general well-being, to obtain his prior consent for medical procedures and to provide him with copies of the reports and results. He also sought an order varying paragraph 2 of the October 2005 Consent Order, reducing maintenance from CI$3,500 to CI$2,500. GD then filed an Amended Summons dated 11 July 2011 in which he sought an order that the variation application be adjourned for a hearing in September 2011. That application for a variation of the consent financial orders does not appear to have been considered by the Court, as the parties thereafter concentrated on the ongoing dispute about child arrangement orders. The child arrangement orders issues at the time, primarily dealing with contact, were dealt with in a comprehensive fashion in the orders of Hall J. dated 2 October 2013 and 16 October 2013.
The present Summonses came before McMillan J. on 11 March 2015. He made an order adjourning the Summonses and directed that both be listed to be heard on the same date. The Summonses were listed to be heard today.
I have reviewed the relevant affidavits before me, namely those sworn by SD on 2 March 2015, 29 February 2016 and 4 March 2016 and those by GD sworn on 9 March 2015 and 2 March 2016. SD’S CASE SET OUT IN HER AFFIDAVITS
In her affidavit sworn on 2 March 2015 SD claimed that the arrears of CI$10,500 had accrued for child maintenance monthly payments of CI$1,750 for C as they had not been paid since September 2014. She also claimed that GD had failed to make his contributory payments totalling $9,415.30 towards the educational, medical, dental and optical expenses of the children. It was further alleged that, in breach of the 2005 order, he unilaterally cancelled the standing order in April 2014, and instead he made regular payments for the child maintenance for L into her bank account via internal transfer. It was contended that the non-payment was drawn to GD’s then attorneys by letter on 9 December 2014.
GD’s current attorneys replied by letter on 12 December 2014 stating that their client was “more than prepared to meet his obligations towards his children” and that he had “repeatedly raised certain issues regarding the manner in which your client seeks payment of the children’s medical expenses.” Concern was expressed in the letter that the medical expenses being incurred appeared unusually high and that GD wished to see a detailed breakdown of the medical expenses incurred. Concern was also expressed that SD would delay requesting payment of any expenses with the result that large immediate payments were being claimed. In the letter GD requested that detail should be given in advance of all non-urgent medical treatment and that a claim for medical expenses should be made each month supported by documentation. In the letter GD’s attorneys stated that child maintenance payments had for L had been paid up until November 2014 and that the only arrears were CI$5,250 in relation to the payments for C in September, October and November 2014. It appears that GD was of the view that as C had started College she no longer resided with SD and therefore he did not need to make payments. He said that the total expenses relating to C’s upkeep (excluding tuition) were US$7,355.78 per quarter and that GD’s share was US$3,677.89 (US$1,225.96/month or CI$1,029.80). It was therefore submitted in the letter that GD need not make payment directly to SD as he had been making maintenance payments of CI$1,029.80 per month and, as a consequence, he had been placing CI$720.20 in a separate account for additional expenses which may arise. It was submitted that the CI$1,750/month order should cease, although there could be discussion about a reduced payment being made.
SD’s attorneys replied by letter on 19 December 2014 in which it was stated that she had contacted GD in advance concerning medical treatment, highlighting difficulties in obtaining funds from him to pay invoices in advance. It was suggested that moving forward she would advise GD in advance of all non-urgent medical treatments via email, provide him with relevant invoices on the last business day of each month and that GD should then make payment of his share within seven days of receipt. Payment of medical expenses totalling US$8,059 was sought pursuant to paragraph 3 of the 2005 Consent Order. In the letter the attorneys highlighted that it had been inappropriate for GD to unilaterally vary paragraph 2 of the October 2005 order by him not making child maintenance payments and his cancelling the standing order. It was stated that a payment of arrears assessed at CI$5,250 should be paid. It was suggested that SD still had to incur expenses for C which included pocket money, clothing, extra school-related items, and airfares for C to visit Cayman. The letter also highlighted that the children were covered on SD’s health insurance for which no contribution was or had been sought from SD.
In her affidavit sworn on 29 February 2016 SD claims that the arrears of child maintenance for C ordered under paragraph 2 of the 2005 Consent Order had increased to US11,680 (CI$9,577.60). SD claims that SD was US$3,517 in arrears for the medical expenses for both children pursuant to paragraph 3 of the said Order. It is contended that although GD stated that he had set up a new standing order for payments, any payments that were being made were made inconsistently and not on the last working day of each month.
SD commented that McMillan J. had directed at the hearing on 11 March 2015 that GD was required to bring all arrears up-to-date for his Summons was to be heard. There is no reference to that direction in the sealed Court Order from that day or in the Judge’s Minute of Order. SD also claims that paragraph 5 of Henderson J.’s Order dated 20 July 2011 required there to be a material change of circumstances before any application to vary the October 2005 Consent Order could be made. However, on close consideration of Henderson J’s Order that direction only related to paragraph 1 to 4 of his order which dealt with child arrangement and not financial matters. Henderson J.’s direction is not applicable to the present Summonses.
At paragraph 13 in her affidavit SD outlines the payments to C’s college which she views as being a part of the educational costs totalling US$7,355.78. At paragraph 14 SD lists the nature of additional expenses for C which are quantified in an exhibited spreadsheet.
SD suggests at paragraph 19 in her affidavit that a way forward would be: (i) for the parties “to equally bear the cost of the educational cost of the children, which would include all education related expenses as itemised on the relevant educational institution’s invoice, until each child respectively reach the age of eighteen years or until they respectively have completed their further education and any other professional or other training at university or similar institution. For the avoidance of doubt this would include all costs and those associated with the children’s education;” (ii) for GD to pay SD “CI$2,750 per month per child which would include expenses such as medical, counselling, dental and optical expenses; all other extra-mural activities; educational necessities (uniforms, school supplies, costumes etc.); school trips (including overseas trips); health insurance; summer camps; travel to/from the relevant educational institution, university or similar institutions; clothing; other daily essentials and spending monies. This would also include child support as set out in paragraphs 2 and 3 of the Order except educational costs;" and (iii) for the above educational expenses to be "made directly to the relevant educational institution, within the terms of payment required by that institution" and for the payments outlined in paragraph (ii) to be paid by standing order on the last working day of each month. It was also suggested that "the scholarship funds will be set off against the total educational costs prior to the parties paying their equal share of such costs." GD's Case Set Out In His Affidavits
In his affidavit sworn on 9 March 2015 GD stated that he had not unilaterally decided to cancel the standing order, because his previous bank account had been closed and he had problems setting it up with his new bank. He contended that, although he may not have made the child payments for C directly to SD, he had been making payments "in a different form" from September 2014 as a consequence of the changing circumstances for C due to her attendance at college. SD was of the view that C was no longer residing with her mother and so he was paying his share of the vast majority of C's living expenses, tuition and general education costs. GD contends that his payments also went towards his contribution for C's housing, meal plans and health insurance costs. GD reiterated the detail, contained in the 12 December 2015 letter from his attorneys to SD and as set out in paragraph 13 above, about C's expenses. SD reiterated that his monthly contribution to C's expenses should be CI$1,029.80. GD stated that pursuant to SD's request he had made those payments directly to the college. He indicated that he had been contributing CI$1,029.80/month and paying the balance of approximately CI$700 into a separate bank account for C’s benefit and it could be used to cover additional expenses that may arise in relation to her upkeep. GD contended in the affidavit that it would be unreasonable to expect him to make monthly child maintenance payments of CI$1,750 directly to SD and at the same time make the additional contribution towards C’s educational and living expenses at college.
In the affidavit GD expressed concern about the nature of and level of the children’s medical expenses, a number of which he says he had not been consulted about prior to the treatment being given and costs incurred. GD stated that he had settled all of the outstanding medical expenses claimed by SD, save for counselling sessions, and had made a payment totalling US$8,000.
In his affidavit sworn on 2 March 2016, GD reiterated his refusal to pay fees for counselling as he was not satisfied that it was required. He also commented that the “billing memos” submitted by SD to him included expenses that he felt were covered by the general monthly maintenance figure, for example monthly transfer transit transportation tickets to New York, flights from New York to the Cayman Islands. GD stated that the US$3,517 claimed by SD for miscellaneous/education expenses were already covered in general monthly maintenance and should not be duplicated. He highlighted his view that medical expenses were still not pre- agreed and that he received sporadic invoices for unexplained/illegitimate expenses.
In the affidavit GD stated that SD was misrepresenting what McMillan J. had said about the hearing of his Summons and the clearing of any arrears. GD indicated that he had taken on board some of McMillan J.’s comments and made some payments. As a consequence he felt he had brought the arrears up-to-date by paying the sum of US$4,998 to SD. This amount was made up of the US$833 he had been placing each month in a separate bank account for C’s benefit from September 2014 to February 2015.”2 GD said that he made similar payments for March and April 2015 until she ended her attendance at her previous college.
GD stated that from May 2015, save for in November and December 2015, he made child maintenance payments of CI$1,750 for C in line with paragraph 2 of the October 2005 Consent Order. GD said that in the summer of 2015 he paid US$8,716 towards C’s educational costs for the first semester at her present college.
GD said in his affidavit that the first time SD has given him any detail about the scholarship C had been awarded by a local business entity was in SD’s affidavit of February 2016. In the affidavit GD stated that he had learnt that C had received a full scholarship from a third party, a fact which he said C and her mother had at 2 US$833 was the difference between CI$1,750 per month and what he was paying to C’s College (excluding tuition fees) for upkeep (2134-1301 = 833). the time failed to bring to his attention. When asked, he said that C informed him that she had received a scholarship, which all parties agree is in the region of US$40,000 per annum. As a consequence, GD did not make payments for November and December 2015. During today’s hearing it became clear from emails exhibited to SD’s affidavit sworn on 4 March 2016 that in July 2015 he was aware that there had been a scholarship granted. For the purpose of today’s hearing I need not make any finding about the date and nature of disclosure given.
GD said in his affidavit that on 26 February 2016 he received a billing memo from SD which provided some detail about the scholarship amount and how she had, without consulting him, utilised some of the amounts owed to him to offset other expenses which she said C had incurred.
In his affidavits GD denied that there were arrears of maintenance of US$11,680 and medical expenses of US$3,517 as alleged at paragraph 3 in SD’s latest affidavit. He contended that he has made all maintenance payments save for November and December 2015.
GD contends that, although he has been promoted from Associate to salaried Partner at his firm, he had not received a substantial increase in his salary. He stated that his outgoings had increased as he now has two children aged three and five, as well as a substantial mortgage due to him having to obtain a new home to accommodate his growing family. SD confirmed that she had been promoted to Equity Partner in her firm and GD claimed that she has a substantially higher income than him and that she is married to a partner in the same firm. GD expressed his view that C is off island for eight to nine months of the year and that L spends every other weekend at his home, as well as half of the long holidays. CONCLUSION
There has been a change of circumstances. It is quite clear that it requires a variation, especially in relation to C, to at the very least the mechanics of the financial orders made around ten years ago, back in 2005. The parties, ably assisted by Counsel, have spent a considerable amount of time outside of Court this morning in productive negotiations and, to their credit, have reached a comprehensive consent order. They have taken me carefully through the terms of the draft order and I have suggested very minor amendments to the wording. When I considered the provisions of the consent order, I had regard to the background which I have already outlined. I need not make any findings of fact in relation to that background or the areas of factual dispute, but I have set out the background and each party’s case in this Ex Tempore Judgment as that summary may assist any court in the future. When I say that, I truly hope that this is the final chapter of this family’s lengthy involvement in court proceedings resulting from the parties’ divorce. What is clearly needed is better and timely communication and disclosure between the parties, which would hopefully prevent these issues arising again in the future.
I still have a duty to consider the content of the draft consent order and to satisfy myself that it is an appropriate order before approving it. The Court approving a consent order is not simply a rubber stamping exercise. As the order to be varied was made within divorce proceedings, pursuant to s. 19 Matrimonial Causes Law (2005 Revision) “the Law”, I must have regard first of all to the best interests of C and L. I must do so when I also have regard to the responsibilities, needs, financial and other resources, actual and potential earning power and deserts of the parents. Paragraph 23 of the Law grounds my jurisdiction to vary and provides that either party may make application for variation of any order made under s.21 of the Law and this includes varying an order made under s.21 (f) for periodical payments for the benefit of a child of the marriage.
The terms of the consent order are as set out in the draft which is appended to this Ex Tempore Judgment. I am satisfied that the proposed consent order meets the changed circumstances of C. I am also satisfied that it reflects the responsibility each parent has to ensure that both C’s and L’s day-to-day well-being, including health, is maintained. The submitted consent order sets up a sensible mechanism for payments as well as tailoring the types of payment to be made to meet the circumstances that now exist. It is hoped that this consent order, which the parties understandably feel will better enable them to manage their financial arrangements, will give more certainty and reduce the likelihood of dispute and resultant further proceedings.
Accordingly, I approve the consent order. I commend both parties and Counsel for reaching this sensible and comprehensive agreement at Court today. Honourable Mr. Justice Richard Williams JUDGE OF THE GRAND COURT